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Virgin Will Bid for Northern Rock on Monday: Branson

British billionaire Richard Branson's Virgin Group will bid for ailing mortgage lender Northern Rock by a government deadline on Monday, the entrepreneur said.

"We believe we will create a very strong bank in the future and we hope to make sure the taxpayers will get all their money paid back," Branson told reporters in Moscow on Thursday.

Richard Branson
AP
Richard Branson

He declined to provide further details or comment on whether Virgin will sweeten its previous proposal to make it more attractive for Northern Rock shareholders, which has been speculated.

Two other potential rescuers are expected to join Virgin in submitting an offer by Monday's deadline -- investment group Olivant and an "in-house" proposal by the bank's management are regarded as the other front-runners.

Other suitors could also emerge, notably buy-out firms JC Flowers and Cerberus, although financial market turmoil and the looming deadline make them long shots to win the auction, analysts have said.

The government is seeking a rescuer for Northern Rock after lending it about 25 billion pounds ($49.7 billion) since the bank was engulfed in crisis in mid-September, when it was unable to raise cash in financial markets following a liquidity squeeze.

The government has backed a financing package that would be available for any bidder, which is likely to tie the Treasury to Northern Rock for several years.

Northern Rock shares closed 2.1 percent lower at 107 pence, giving it a market value of 450 million pounds.

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